Steps to Buying a Car with Bad Credit

Steps to Buying a Car with Bad Credit

Are you looking to replace your dinged-up car, and trying to do it with dinged-up credit? You’re not alone. Buying a car with bad credit is something that many people have to face.*

If you need a new car, you’ve generally got two options: Buy outright with cash or get a loan. There are pros and cons to each of these.

The obvious reason for buying an older, used car is that the total price tag may be lower, at least to acquire it. However, according to, one of the problems with buying a used car is that for some buyers, the maintenance and repairs may prove too costly in both time and money.

Buying a newer used car or a new car when you have bad credit may be possible. Here are some helpful steps.

  1. Learn about how credit works.

Start by learning your own credit score and by looking at all the details of your own credit report to become a credit-savvy consumer. It is possible that there may be things affecting your credit report of which you aren’t even aware, or simply aren’t accurate. The Consumer Financial Protection Bureau (CFPB) recommends checking your reports at least once a year for errors that might prevent you getting credit. Additionally, learn about credit in general. Browse through websites and learn as much useful information as you can. Consider starting with the CFPB and Federal Trade Commission websites.

  1. Carefully manage your own expectations.

You’re a nice person, right? Why wouldn’t someone loan you money? Well, in fact, asking yourself why they wouldn’t loan you money may give you a broader perspective, and help you understand the position of the seller/dealer and the lender. Try asking instead, “Why would they loan to you?” Then, learn everything you can about your own creditworthiness to gain a balanced understanding.

  1. Start preparing to buy

When it comes time to sign on the dotted line, you don’t want to have new information thrown at you that changes the nature of the deal too much. (Note: Adjustments are a normal part of every big purchase. We simply mean to encourage buyers not to fly blind.)

  1. Enjoy your purchase

Buying the right car is fun! If you have sufficiently prepared and are educated about the details of the car-buying process, even having bad credit may not rob you of the enjoyment of driving a new car.


* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press),,, Investopedia, and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by and Santander Consumer USA.

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